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 But widespread skepticism about accomplishing various financial
sector policy priorities, such as scaling back the 2010 Dodd-Frank
law or enacting business-friendly tax reforms, amid Washington's
paralysis has dampened the excitement of some traditional financial
industry donors, such as big banks.
Instead, the upswing in donations reflects an ideological shift, as
right-leaning hedge fund managers and private equity executives
increasingly throw big money into key national races rather than
focusing on specific issues, industry insiders and campaign finance
experts said.
Nearly 62 percent of disclosed financial sector donations in
congressional races have gone to Republicans or Republican-aligned
groups in this election cycle, compared with 53 percent in 2010, the
last midterm election cycle, according to the Center for Responsive
Politics, a Washington research group.
The numbers are based on Federal Election Commission filings through
early September, and spending is likely to increase in the final
weeks before Election Day. Overall, the sector has given more than
$318 million so far this cycle, compared with $328 million over the
entire 2010 election cycle.
The next highest-spending industry sector is lobbyists and lawyers,
according to the Center for Responsive Politics.
Robert Wolf, a confidant of President Barack Obama who now runs a
financial advisory firm after having served as an executive at UBS,
said donors are more focused on helping their preferred party
succeed than on individual issues.
INVESTING IN THE POWERFUL
The roster of major contributors includes big hedge fund donors,
such as Paul Singer of Elliott Management, who have backed groups
that explicitly aim to help Republicans regain control of the
Senate.
Finance industry experts said some of the shift was due to
disillusionment with Obama, who they felt had demonized them in the
aftermath of the financial crisis. Others became frustrated over tax
proposals championed by Democrats that they thought unfairly
punished hedge funds and other financial firms.
Top conservative fundraisers picked up on the discontent and began
engaging hedge funds and other nonbank financial institutions more
in recent years, said one Washington-based hedge fund industry
insider.
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"I think the Republican machine did a very good job of saying, look,
we sort of know most of the bank Republicans, we know sort of a lot
of the insurance Republicans. We don't spend a lot of time with
these hedge fund guys," the insider said.
In fact, the shift comes as many of the traditional financial
services donors express apathy toward Washington.
Most experts believe lawmakers will not significantly revamp the
Dodd-Frank Wall Street oversight law under this president, who
championed the reforms. The only changes they anticipate are tweaks
to benefit smaller banks.
Immigration reform, supported by high-profile bankers including
Lloyd Blankfein of Goldman Sachs, appears unlikely to move forward
in Congress for now, and tax reform was unable to gain traction in
2014.
And financiers have clashed with conservatives over
business-friendly programs such as temporary tax breaks, as well as
Tea Party-aligned lawmakers' willingness to shut down the government
in 2013 and flirt with debt default several times in recent years.
That dynamic has prevented big banks from leaping whole-heartedly
into the midterms.
In some neck-and-neck races, Democrats even hold the advantage among
financial sector donors. Senator Kay Hagan, a Democrat of North
Carolina who is a former bank vice president, has outpaced her
Republican opponent in fundraising from the sector.
(Reporting by Gabriel Debenedetti and Emily Stephenson; Editing by
Leslie Adler)
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